Minister says BCA team legal, IBRA insists it's not

Minister says BCA team legal, IBRA insists it's not

The Jakarta Post, Jakarta

The controversy surrounding the sale of Bank Central Asia
(BCA) continues, even in its final days, as the government claims
the team that will name BCA's winning bidder is legally valid,
while the agency in charge of the sale insists it is not.

State Minister of State Enterprises Laksamana Sukardi ruled
out the Indonesian Bank Restructuring Agency's (IBRA) charge that
the setup of the team would violate regulations.

"The BCA divestment process must be prudent but the formation
of the team does not violate Government Regulation No. 17,"
Laksamana was quoted as saying by Reuters late on Tuesday.

The government decided to set up a high-level team to pick the
winner of the crucial BCA sale, which has, over the course of its
three-year long process, become a litmus test of Indonesia's
resolve to attract foreign investment.

Laksamana said the team of senior ministers and the central
bank governor among others, would ensure the credibility of the
sale.

Yet his decision came just a week before IBRA planned to
announce a winner, drawing fire from IBRA chairman I Putu Gede
Ary Suta.

Ary Suta argued that IBRA had the full authority to direct the
entire sale process of the state assets it controls.

IBRA plans to sell off a 51 percent stake in BCA to one of the
two remaining consortia. They are either Standard Chartered Bank
Plc of Britain or Farallon Capital Management of the U.S.

The two have been named the surviving bidders in a sale that
floundered twice since it was launched three years ago.

Last year's relaunch of BCA's sale has won the praise of the
International Monetary Fund (IMF) for its "appropriate" conduct.

Now, Ary Suta warned the team's setup might hamper the sale.

"We don't want to create further complications, especially at
the end of the (sale) process," he told reporters.

But the latest snag threatening BCA's sale process has had
little effect on the market.

The rupiah and the stock exchange maintained their
upward trend on apparent confidence of an imminent BCA sale.

Against the U.S. dollar, the rupiah rose to 9,958 from 9,980
the day before, while the stock market index rose a hefty 17.69
points to close Wednesday's trading at 476.

Ary Suta said he would meet Laksamana to straighten out their
differences, adding the latter would "understand".

Their conflicting statements, however, may signal more than a
simple quarrel among top government officials.

Laksamana's decision to deny IBRA its right to set a winner
for BCA is seen by some as being directly aimed at Ary Suta's
integrity.

With much of the country's economic potential locked inside
the agency, IBRA has become a hotbed of vested interests.

Ary Suta has dragged himself under the media spotlight on
several occasions over a number of controversial IBRA decisions.

His position, a legacy of former president Abdurrahman Wahid's
administration, has so far remain unscathed.

Under President Megawati Soekarnoputri, Laksamana has moved to
place IBRA under his control, which many believe means that Ary
Suta's days are numbered.

Yet he managed to maintain a working relationship with
Laksamana, even though he kept passing controversial decisions.

It was not clear whether Laksamana had Ary Suta's IBRA in mind
when he told reporters last Monday that leaving the entire sale
process under one party may result in "funny things" happening.

In a hearing with legislators on Wednesday, the two were seen
avoiding each other, although they occupied the same row of
seats.

Ary Suta left one chair between him and Laksamana vacant, as
he sat with his back slightly turned away from the state
minister.